Natixis furthers its ambitions in the Asia-Pacific region
Natixis continues to develop its global expertise in the Asia-Pacific region, through the Corporate & Investment Banking business and Natixis Global Asset Management. Natixis supports its Asian and international clients by adapting its solutions to local economic circumstances.
Asia-Pacific: a high-potential region
The Asia-Pacific region accounted for 48% of the world’s population and one fifth of the global economy in 2014. By the end of 2015, the region - not including already-wealthy Japan - is expected to be home to the majority of global financial wealth. The flip side of the coin, which is making headlines at the moment, is the slowdown in the growth of Asian economies, particularly China, and the corresponding impact on the global economy. This said, economic growth rates in China and most Asian countries far exceed those attainable in the west and these fears of economic slowdown only serve to further underline the vital role that Asia now plays for the rest of the global economy.
“Asia remains the world economy’s biggest growth driver and (excluding Japan) will deliver more than 50% of global growth in 2015. Despite short-term challenges, the region’s general dynamism, increasing development and rising prosperity can only continue in the coming years”, asserts Alicia Garcia Herrero, Natixis Chief Economist for the Asia-Pacific region.
Natixis steps up its expansion in the Asia-Pacific region
Natixis has been present in the region since 1970, when it opened a representative office in Bangkok. It now employs more than 600 staff spread across 12 countries. The internationalization of Natixis’ business lines - essentially within Corporate & Investment Banking and Natixis Global Asset Management (AM) – is one of the pillars of the New Frontier strategic plan.
For Pierre Servant, member of Natixis’ Senior Management Committee and Chief Executive Officer of Natixis Global AM, “we have greatly increased our presence in the Asia-Pacific region these last few years and it will remain key for Natixis Global AM’s expansion in the coming years”.
Natixis is notably furthering its growth ambitions in China, particularly via Corporate & Investment Banking and its conversion of its representative office in Beijing into a branch. “This development will allow Natixis to provide better support to Chinese clients in their international expansion plans, explains Olivier Perquel, member of Natixis’ Senior Management Committee and Head of Financing and Global Markets. “It also marks a new and important stage in the internationalization of Natixis’ activities”.
Presence adapted to regional circumstances
Asia-Pacific presents a diverse panorama, not only in terms of regulations, but also culturally, linguistically and monetarily, while levels of economic maturity are clearly uneven. Natixis therefore employs different growth strategies adapted to the market in question and to local circumstances.
In fast-growing countries like China, Indonesia and Malaysia, financing opportunities are naturally greater. In mature countries (particularly in Japan, Korea and Taiwan), where liquidity reserves are high and key rates low, Natixis delivers customized investment solutions, particularly to financial institutions, insurers and asset managers.
Natixis Global AM deploys its Durable Portfolio Construction approach locally in order to deliver the best advice to clients on their native markets. It now serves some very high-profile names in the pension fund industry (in Australia, Japan, Taiwan and Korea) and also works with major institutional clients including sovereign funds in China, Hong Kong and Singapore, and life insurance companies in Japan.
Natixis deploys its major lines of expertise in Asia-Pacific
Natixis allows large Asian corporations to leverage its know-how in the energy, commodities, aircraft and infrastructure finance fields and positions itself with financial institutions as a “solutions house”. The Bank offers clients access to western markets and distributes assets from its other international platforms (Americas and the EMEA region). Natixis harnesses its extensive knowledge of the French and European markets to facilitate relations for Asian investors looking to expand their interests in western companies.
The Bank helps European clients expand in Asia by providing access to emerging financial markets (bonds, equities, structured products, etc.) and by financing their development projects. Natixis also contributes to diversifying Groupe BPCE’s sources of finance, via bond issues in various currencies. It notably assisted Groupe BPCE with Samurai and Uridashi issues in Japan, with Singapore dollar issues in Singapore, with the Group’s first Dim Sum issue in Chinese renminbi in spring 2015 and with Kangaroo bond issues in Australian dollars.
Natixis Global AM essentially acts as a global distribution platform for the funds of its 26 affiliates - particularly Harris Associates, Loomis Sayles, AEW Europe and H2O – on the Asian market. It operates from seven offices in the Asia-Pacific region: Tokyo, Singapore, Sydney, Taipei, Beijing, Hong Kong and Seoul. It is also underpinned by Emerise, an asset management firm opened in Singapore in 2015 and by IDFC, another asset manager located in Mumbai and in which it owns a 25% stake. Natixis Global AM also started to distribute funds for retail investors in 2009, to the extent that this segment now accounts for 20% of assets under management. Through its affiliates, Natixis Global Asset Management has access to a diversified range of products enabling it to offer clients fully-customized investment solutions.
Natixis still has big ambitions for the Asia-Pacific region
Corporate & Investment Banking is continuing to expand in the Asia-Pacific region. In addition to the new branch in Beijing opened in October 2015, it is setting up a new strategic advisory team in Hong Kong.
In the asset management business, Natixis plans to step up its presence in the pension fund and sovereign fund markets and with large insurers. Natixis also has a major challenge ahead of it in the fast-expanding wealth management segment, which is run from Natixis Global AM’s hubs in Singapore and Hong Kong. Corporate & Investment Banking is also developing its range of structural products for this new client segment. These efforts reflect Asia-Pacific’s status as the region with the fastest increase in the number of individuals owning financial assets over $1m (High Net Worth Individuals or HNWIs, up 88% in the last eight years) and the fact that it already accounts for 40% of the world’s HNWIs*.
*Asia-Pacific Wealth Report 2015 Capgemini / RBC Wealth Management.
In terms of its share of the world market, the Asian asset management market is still emerging, though expanding at a very fast pace. The New Frontier strategic plan is targeting €75bn in net inflow in Natixis’ asset management business in 2017. Close to €7bn of this amount concerns emerging markets. This target has already been exceeded.